Barclays: Trade-in subsidies drive a rebound in retail sales in China

LootboxPhobia · 2026-04-01T18:08:48+00:00

According to Barclays' report, China's retail sales in January and February grew by 2.8% year-on-year, with a significant increase in online sales. The recovery was driven by subsidies and the Spring Festival holiday, with strong performance in home appliances and discretionary consumer goods. Meanwhile, second-hand property transactions rebounded, with notable growth in first-tier cities. Electricity consumption and manufacturing also performed well, but sales of new energy vehicles declined.

LootboxPhobia

2026-04-01 18:08:48

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Investing.com - According to Barclays, China’s retail sales rose 2.8% year over year in January and February, accelerating by 1.9 percentage points versus December—its first rebound after seven consecutive months of slowdown. Online physical goods retail sales increased 10.3% year over year, accelerating sharply by 9.5 percentage points from December.

The retail recovery was mainly driven by the extension of trade-in subsidies through 2026 and the Spring Festival holiday period. Sales of household appliances, consumer electronics, video and audio equipment resumed growth, up 3% year over year, rising 22 percentage points from December. Selected consumer categories performed strongly: apparel rose 10.4% year over year, communication equipment climbed 17.8%, gold and jewelry products grew 13%, and furniture increased 8.8%.

Second-home transactions rebounded in January and February, with the transaction area up year over year. Growth was especially strong in first-tier cities, up 41% year over year, including Beijing up 90% and Shenzhen up 113%. The year-over-year decline in new home transaction area narrowed to negative 3.4%.

Electricity consumption rose 6.1% year over year in January and February, up 3.1 percentage points from December. The secondary industry accelerated to 10.6% year over year, driven by high-tech and advanced equipment manufacturing, up 4.9 percentage points from December. The tertiary industry grew 8.3% year over year, with internet and data services surging 46%.

Domestic sales of new energy vehicles fell 7% year over year, down 14 percentage points versus December. Total vehicle sales slowed by 3 percentage points year over year to negative 9%. In 2026 and 2027, China will change the policy on the new energy vehicle purchase tax from full exemption to a half exemption, putting pressure on new energy vehicle sales.

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